tv Nightly Business Report PBS December 27, 2011 7:00pm-7:30pm PST
>> what we've seen, certainly starting with black friday, was a pretty resilient consumer that was out there shopping, spending money, and they really held their own throughout the holiday season, in fact, even throughout this week. >> susie: the holiday season may be proof american consumers are feeling better about the economy than they have in months. it's "nightly business report" for tuesday, december 27. this is "nightly business report" with susie gharib and tom hudson. "nightly business report" is made possible by:
captioning sponsored by wpbt >> susie: good evening, everyone. my colleague tom hudson is off tonight. american consumers are feeling downright cheery this holiday season, the best mood they've been in in eight months. the conference board said today its index of consumer confidence spiked to 64.5 this month, better than expected and up sharply from a revised reading of 52.2 in november. the availability of jobs is what's putting people in better spirits. but is that optimism actually resulting in more spending this holiday season? joya dass reports. >> reporter: two days after d- day for retailers, and it appears shoppers are still going strong. streets and stores in manhattan today were filled. while it's too early to say how jolly a season it was, early indications are positive. >> what we've seen, certainly
starting with black friday, was a pretty resilient consumer that was out there shopping spending money. and they really held their own throughout the holiday season-- in fact, even through this week. >> reporter: overall retail sales, including brick and mortar stores, are still expected to gain 3.8% this year. its not as healthy as last year's 5% showing, but still respectable. online shoppers were tempted by free shipping deals. research firm comscore said free shipping drove and accounted for as much as 60% of online transactions throughout the season. still, it wasn't a merry holiday for everyone. one retail research group found that many parents went without gifts in favor of giving presents to their kids. and today, sears announced it was shuttering as many as 120 sears and k-mart stores as it continued to lose ground to walmart and target. still, last week, data show americans spent 5% more on each holiday shopping trip. but they may have reached into their savings or elsewhere for
the money. for months, personal spending has been outpacing personal incomes, and that's worrisome. >> one is certainly going to be credit cards, and i'm sure we'll get some reports on credit card spending for the holiday season. the other could be savings. >> reporter: and when shoppers didn't find deals in stores, they turned to the web. >> this was the year when the smart phones and tablets came into their own, and in terms of providing another way for consumers to find the best prices, even when they were in a physical store. and i think that we are maybe at the beginning of some very, very interesting changes in the way that consumers shop. >> reporter: in a price conscious economy, the web has become an even more important destination for comparison shopping. with gift cards still getting redeemed and so much data to tally, it's likely to be next week before retailers know how they did during christmas 2011. joya dass, "nightly business report," new york. >> susie: on wall street today, stocks were mostly flat. investors were somewhat encouraged by that consumer
confidence reading we just told you about earlier. still, the dow lost two points, while the nasdaq added six and the s&p 500 edged up a fraction. as for volume, very light on this holiday shortened trading week. >> susie: but investors are still hoping for a santa claus rally. according to wall street lorem, this is when stocks rise in the last five days of the trading year. joining us now to talk about that and the outlook for 2012, rick bensignor, chief market strategist at merlin securities. have you with us tonight. >> hey, susie. >> susie: are we going to get the santa claus rally? what do you think? >> i think we've seen a lot of it already if you look at how much the market rallyed in the last six or sen trading sessions.zit's rallied substant. whether we get another percent or two heading into the last three days of the year and moves up to where it needed to and bounced over the last week or so. >> susie: what's your outlook.
how bullish or bearish are you? >> i think the market probably can start the year off decently, but nlt grand scheme of things, nothing has changed in the big picture. the european debt crisis overhangs the market, and as long as it's a headwind to deal with, it's hard to make a serious case why the market should move higher. a little higher, sure, but a lot higher, hard to make the case. >> susie: do you think the u.s. markets will be hostage to what's going on in europe, or will we be able to decouple from the europe crisis. >> i don't think it's possible to totally decouple. the u.s. has out performed most of the major benchmarks around the globe. the dow is up, and the s&p and flat. most european indices are down. and the u.s. can outperform and probably will, but unless
you fix the crisis this europe, it's hard to think that anything can go up largely. >> susie: so what's your prediction for the new year? will the european policy makers come together and fix that crisis? >> i don't think so. i'm sor tow say it, but i think politicians and politicians are politicians, and policy makers are policy makers, and there's too much to deal with on a macro basis. maybe there will be little ideas. here's something we can do and something else we can do, but when all is said and done, this is a huge problem. it doesn't meat fixed overnight, and the chances are that the key glue that needs to come together to really fix this problem is not likely coming any time in the year future. >> susie: what about in the u.s. in terms of the washington political scene? will that be a headwind or a tail wind for the market? >> it's probably a headwind, because politicians are politicians. we're heading into an election
year. you've got republicans vying for who is going to be the candidate against balm bauchl. and if you look at the inability for congress to pass measureable changes. all they did was delay the tax cut for another two months. they haven't really fixed the issue. they've just pushed the can down the road as they often do. >> susie: investors are trying to figure out what to do with portfolios. what should they be? put mon nestocks u.s. or international? keep them in treasuries or gold? what are your thoughts on that? >> i think you probably want to have a combination. as i said, i suspect the u.s. can still outperform europe. the only way that would change is if europe somehow fixes this, and i'm not sure that's possible. i'd say u.s. centric for u.s. investors, and i'd have a combination of bonds, stocks, and definitely have some gold.
and even though gold may not have found the ultimate bottom from the high up of $1921. we're estimating it gets down to 1425 or so. but in the scheme of things, i think investors want to own some gold. >> thanks for the insight. happy new year to you. >> thank you, susie. >> susie: and we've been speaking with rick bensignor, sheaf market strategist merlin securities. oil prices gushed back above $100 a barrel today on rising tensions in iran over blocking crude shipments. the spike in prices also came on that strong consumer confidence report we told you about. looking ahead, investors in commodities could be in for another wild ride in the new year. analysts say prices for everything from gold to grain could be volatile in the months ahead because of uncertainty over global economics and politics. here's diane eastabrook with the outlook. >> reporter: economic uncertainty at home and in europe, political unrest in the middle east, inflation fears in
china-- all conspired for a volatile year for commodities. the reuters jefferies crb index is down about 15% from its high in may. and the combined crosswinds that buffeted the commodities market this year could do so again in 2012. gold investors got whiplash as the precious metal seesawed from $1,400 an ounce at the beginning of the year up to nearly $2,000, then back down to around $1,600. kimberly dubord follows the commodities market for briefing.com. she thinks gold prices could still increase over fears the u.s. economy will lose its footing and there could be a default in europe. but dubord's bullishness is mixed with caution. >> i think there is a risk that you have a change in confidence and that the fed is going to be there until 2013 leaving rates low. but if you have inflation picking up, or you have employment improving, i think that could really start to unravel what all these conditions have been so bullish for gold thus far.
>> reporter: cash-strapped american consumers have cut gasoline consumption roughly 6% in the u.s. this year, taking oil prices with it. crude oil prices hit a high of $110 a barrel in may before plummeting to around $80 in october. they've been heading higher in recent weeks on signs the u.s. economy is improving. dubord thinks oil prices have the potential to become more volatile next year, especially if this year's arab spring pollinates into other regions of the middle east. >> the u.s. is consuming roughly two million barrels less per day than it was last year at this time, so i still think you're going to get that range bound with the potential to get that unrest and see some big price spikes. >> reporter: industry watchers think industrial metals as a group offer the best potential for price appreciation in the new year. that optimism is partly buoyed by increased auto sales and the seedlings of a manufacturing renaissance in the u.s. and speaking of seeds, grain prices could also take off next year. in the u.s., carryover stocks of
both corn and soybeans are tighter than they were a year ago. add the threat of drought in south america and pfg best senior grain specialist tim hannagan says you have the recipe for much higher grain prices. hannagan says the prospect is already making china nervous. >> they've been very actively buying corn. they've been a little more active buying beans, so the last couple of weeks, we're starting to see china get worried that their secondary source of food quantity might not be able to produce those needs. >> reporter: the m.f. global scandal could also weigh on the commodities market next year. the firm's bankruptcy and missing customer funds could make some investors jittery about pouring money into the market. diane eastabrook, "nightly business report," chicago. >> susie: still ahead, apple's former chief evangelist gives us his outlook for technology in 2012. he's guy kawasaki. more discouraging news today about the housing market-- the
standard and poor's case-shiller home price index showed prices in october were down over 3% from the same time a year ago. sylvia hall reports. >> reporter: across the country and with few exceptions, home prices dropped in october. the closely watched index tracks residential property values in 20 cities. it fell 3.4% in october as home prices dropped in 18 of those 20 cities from the year before. >> altogether, home prices have not hit bottom and these numbers have not started to rebound. >> reporter: atlanta led the decline with annual returns down almost 12% from last year. blitzer blamed poor consumer confidence and the low cost of foreclosed homes. he also cited market watchers. >> anybody who's looking at buying a house looks around at numbers just like this, probably finds it very hard to convince himself that home prices are going to go up. in fact, looking at these numbers, he probably says, "they may go down further. why don't i just wait around for six months to see what happens?"
>> reporter: while data from november and december are still being collected, blitzer says its pretty clear that home prices are still trending lower. sylvia hall, "nightly business report," washington. >> susie: on wall street, "meandering" was the word of the day as the stock averages drifted between small gains and small losses. let's take a look in tonight's "market focus." utility stocks were the leaders of the day with the sector hitting a new high for the year. that just tells you how cautious investors are feeling when these kinds of conservative stocks rally. utilities have been up 5% in the last six sessions, and the sector has been the best performer on the s&p this year, up 15%. some utility stocks hitting 52- week highs today-- southern company, dominion resources, con edison, duke, and american electric power.
one of the reasons investors are buying up utilities is big dividends. each pays on average about 4%. one of the big losers today-- sears. as we reported, sears announced plans to shut as many as 120 stores after disappointing holiday sales. despite markdowns, sales at sears were down 5.5%. the stock trading on the nasdaq plunged 27% to $33. it opened the year at $73, and is down 54% in 2011. whirlpool shares also went down the drain. the appliance maker is a key supplier to sears. whirlpool tumbled almost 9%, losing $4.57. at $46 a share, it has been cut in half since january. it was a mixed bag for some of the nation's other big chain stores. gap, macy's, and target posted gains, but walmart and j.c. penney were down fractionally.
another eyesore in today's trading was computer sciences. the company pulled its 2012 outlook after warning it may lose an important government contract in the u.k. its shares sank 9% to $24.10. it was a better day for shareholders of mead johnson nutrition. the stock surged 6% after the company said tests showed no bacteria in a batch of the infant formula used by a baby who died last week. mead johnson closed at $69, its biggest intra-day gain since july. the company's stock fell 15% in two days last week after walmart and other retailers pulled the enfamil formula from store shelves. and finally, mcdonald's continues to sizzle. the stock inched higher, closing firmly above the $100 mark. it's been a golden year for the golden arches. shares are up more than 30%, the best performer in the dow this
year. the dow's worst performer this year? not surprisingly, it's bank of america. those shares are down almost 60%. we're just two weeks away from the big consumer electronics that's when tech companies from show in las vegas. that's when tech companies from all around the world display their latest gadgets and services. to find out the outlook for technology in 2012, we turn to guy kawasaki. he was apple's chief evangelist, and he's author of "enchantment: the art of changing hearts, minds and actions." sorry i messed up on the title. it's an unusual title for corporate mark. >> as long as you don't mess up my name. >> susie: i did already on that. listen, guy, i want to get your take on technology. get your take on apple. you spent so much of your
career there. what can we expect from apple with steve jobs gone n terms of not only existing products likes ied pa, iphones, ipods. any new things coming out of the company? >> it's very sad that steve is no longer with us, but prior to his untimely death, clearly the company has put in product plans for the next year or two. i think for the next yeerp or two, you can depend on a steady stream of new phones -- a seven inch ipad. they're addressing the tv market, one of the last great markets that apple could address. i think it's a good time for an apple shareholder and an apple customer. >> susie: what your your outlook overall for technology? where is the most growth and >> i think the most growth and innovation is going to come in social media. social media a few years ago started off as an experiment, started off as this weird thing on the side of most companies. it's now mainstream.
it's so mainstream we're going from a position of let's experiment with social media to its essential. and also people are figuring out how to monetize social media. so many people are interested in jobs, and job outlooks and technology. and i think social media is a great place. and it's going to take you some knowledge and competence. one of my partners specializes in teaching and training people about social media. get ready for the social media thing as it comes down main street. there are going to be a lot of jobs in it. it's a great way to make advances in your career. >> susie: where do you see others tech area that is are growth sectors? what else are we talking about at this time next year. >> i think we'll be talking about the success of google plus as one of the big three in social network. twitter, facebook and google plus. and i think amazon is making great strides with kindle.
kindle fire is a nice price point at $200 subsidized by book pfrns. the kindle fire is showing that people are readinging books electronically. it may emergencyinalize the printing of books on paper, but i think more people will read more books, and i think it will be good for authors and literacy in general. >> susie: what about hewlett packard. there's talk about meg whitman running hp. can we expect magic out of hp? >> meg whitman is a friend of mine, and for understands technology, and consumer oriented in ebay. so i think her decision not to get out of the peripheral computer business was a good one. hp is a $150 billion company that no one respects. it's truly a sleeping giant.
if it woke up with meg's leadership, i think it can. it could rock. >> susie: we'll chat with you next year, guy and see how all of your predictions turn out. thanks so much. >> thank you. >> susie: and especially for the new year for you. >> thank you. >> susie: we've been speaking with guy kawasaki, author of enchantment. here's what we're watching for tomorrow. a light day on the economic calendar. we'll see the weekly chain store sales numbers, and earnings from fertilizer maker mosaic. also tomorrow, the federal reserve wants to boost communication in the new year. we'll look at what it's saying and forecasting for 2012. president obama may be on vacation, but that didn't stop him from filling two vacancies on the federal reserve's board of governors. he nominated harvard economist jeremy stein to the seven-member board. 51-year-old stein served as an advisor to the treasury secretary at the start of the obama administration.
the president also nominated former private equity executive jerome "jay" powell to the board. powell is 58. he was treasury undersecretary during the administration of president george h.w. bush in the early 1990s. also coming from the obama administration-- a new fee to health insurance plans. the $1 per person fee goes into effect next year to pay for research into which drugs, tests and treatments are most effective. it was mandated by last year's health care overhaul. but the treasury department says it will likely be another year before the funds are actually collected.
this is the time of year that people make new year's resolutions. tonight's commentator says he's not among those wishing for a new spirit of bipartisanship in washington. he's todd buchholz, author of "rush: why you need and love the rat race." >> remember that book, "all i really need to know i learned in kindergarten"? shouldn't democrats and republicans learn to get along? stop the bickering? let moderates take charge? wouldn't it be nice? no. sometimes, a country must take a hard turn, follow a strong leader in a clear direction, not toward some muddled middle. the u.s. is careening towards bankruptcy precisely because politicians grew too comfortable and avoided hard decisions.
ask republicans to name their favorite president, and they'll answer ronald reagan. sure, he had charm, but reagan also had controversial convictions. but after the mushy failures of jimmy carter, americans were ready to take a chance on slashing taxes and bankrupting the soviet union. ask democrats to name a favorite, and you'll often hear franklin roosevelt. fdr had charisma, but he also tried to stack the supreme court. yet after the failures of herbert hoover, americans embraced his new deal. 2012 will not be the year of bipartisanship. that's okay. americans are not campfire girls sitting cross-legged, arm-and- arm and singing "kumbaya." we've got tough choices. we can handle tough rhetoric. playing nice and doing nothing doesn't work in kindergarten, and it certainly doesn't work for a 236-year old country. i'm todd buchholz. >> susie: 1,400 hours, over 16 states, and $281 million in payouts. that's this season's crop of
almost three dozen college football bowls. tonight's "beyond the scoreboard" looks at whether there are too many bowl games. here's rick horrow of horrow sports ventures. >> reporter: i'm here at the belt bowl in charlotte, north carolina, one of 35 bowls that cynics say is way too many. they miss the point for four reasons. one, it gives 70 schools a moment in the sun. significant recruiting, alumni donation, admission, all tied up in their one big day versus about 20% or 30% of schools participating in basketball and baseball. you understand the difference. second, scarborough research says that bowl viewers on tv are the most prolific buyers for all advertisers. they want to get in front of these fans. that's why they sponsor the games. third and probably most important, the significant dollars that are generated by corporate america, $80 million of exposure by tostitos for the fiesta bowl a couple of years ago.
>> a couple of years ago, allstate, a significant advantage for new orans the championship a week and a half from now. and finally most important, in charlotte, a $50 million economic impact with two mediocre teams. when you look around the country, nearly $2 billion of impact because of these bowls in 35 regions across the country. bottom line, is in times of economic turbulence, what better way to gen rit economic stimulus. they're here to stay. get excite body them. watch the games or not. it's a very important part of the corporate and business landscape. i'm rick horrow. >> susie: that's "nightly business report" for tuesday, december 27. i'm susie gharib. good night, everyone. we hope to see all of you again tomorrow night. "nightly business report" is made possible by: